Pronunciation: (dē-fed'ur-u-līz"), [key]
—v.t., -ized, -iz•ing.
to shift the functions or powers of (an agency, service, etc.) from the jurisdiction of the federal government to that of state or local government: to defederalize construction loans. Also, esp. Brit.,de•fed'er•al•ise".
Random House Unabridged Dictionary, Copyright © 1997, by Random House, Inc., on Infoplease.